Alibaba Group owns about 73.5% of e-commerce leader Alibaba.com, which is the company's only publicly traded subsidiary. Under the terms of the deal, Alibaba Group would buy the other 26.5% of the company for 13.50 Hong Kong dollars ($1.74 U.S.) per share in cash.

That's a 55.3% premium above Alibaba.com's average closing price over the last 10 days -- but it's the exact same price the company fetched in its initial public offering in November 2007.

Taking the web portal private "will allow our company to make long-term decisions that are in the best interest of our customers and that are also free from the pressures that come from having a publicly listed company," Alibaba Group CEO Jack Ma said in a prepared statement.

Alibaba has been in the news frequently over the past year for its contentious relationship with Yahoo (YHOO, Fortune 500).

Yahoo owns about a 40% stake in Alibaba, which is considered one of its most valuable assets. But Ma and former Yahoo CEO Carol Bartz had a public dispute over ownership of Alipay, an online payment unit similar to eBay (EBAY, Fortune 500)-owned PayPal.

According to media reports, Yahoo had been in advanced talks with Alibaba and Japan-based Softbank to discuss selling its stakes in Alibaba and Yahoo Japan. But those talks reportedly collapsed earlier this month.